In a nutshell, there are three main ways in which a trust deed may be amended.
The first method is by signing an amendment agreement. The option is possible if the trust's founder is still alive since the founder will need to sign the amendment agreement with the trustees.
Any beneficiaries who have derived a benefit from the trust must also sign the agreement since the amendment may have a bearing on their future position vis-a-vis the trust and whether or not they may receive any further benefit therefrom. This is the position that was confirmed in the case of Ferreira and Another v Van der Merwe N.O and Others [2019] ZAECPEHC 39
The second method is by making use of the amendment clause in the trust deed itself. If the trust deed has been drafted correctly, it should contain an amendment clause detailing how it may be amended.
To use this method, one simply has to comply with the requirements set out in the trust deed to effect the desired amendment to the trust deed. If the trust deed is silent on this then an alternative method of amendment will need to be used.
When the trust deed does contain a clause that allows for its amendment and the amendment clause does not require the consent of the beneficiaries and the beneficiaries have already accepted a benefit from the trust then the beneficiaries have reconciled themselves with the terms of the trust deed and accordingly, notice need not be given to the beneficiaries in this instance.
The third method is by application to the High Court. This method may be the only option available should the founder of the trust be deceased and the trust deed is silent on how amendments to the trust deed should be effected. This method would require that the circumstances under which the deed is to be amended and the nature of the amendment be fully disclosed to the court.
In the interest of justice and transparency, the court will in all likelihood require that notice be given to the beneficiaries of the trust to allow them the opportunity to make representations relating to why the trust deed should not be amended or to put an alternate case before the court should they wish to do so.
Should you require assistance related to the amendment of a trust deed, Thomson Wilks Inc. has experienced attorneys who will be able to assist and advise on the best options available to you.
Feel free to give us a call at 011 784 8984 or email info@thomsonwilks.co.za.
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20 June 2023
